Elearnmarkets - Financial Market Learning
  • Categories
    • Basic Finance
    • Derivatives
      • Futures
      • Options
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Stories
Elearnmarkets - Learn Stock Market, trading, investing for Free
  • Categories
    • Basic Finance
    • Derivatives
      • Futures
      • Options
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Stories
Elearnmarkets - Learn Stock Market, trading, investing for Free
No Result
View All Result
Home Technical Analysis
5 Powerful Bearish Candlestick Patterns 1

5 Powerful Bearish Candlestick Patterns

Vivek Bajaj by Vivek Bajaj
November 30, 2023
in Technical Analysis, Charts, Patterns & Indicators
Reading Time: 7 mins read
10
99.1k
VIEWS
Share on FacebookShare on XShare on WhatsApp

After having a basic understanding of candlestick chart patterns, let’s dive into Bearish Candlestick Patterns that indicate the ongoing uptrend which is going to end and it may reverse to the downtrend.

These Bearish Reversal Candlestick Patterns can be single or multiple candlestick patterns.

One should note that:

  • Bearish reversal patterns should form at the end of an uptrend. Otherwise, it will act just like a continuation pattern.
  • One should confirm the reversal signals given by bearish reversal patterns with other indicators such as volume and resistance.
Table Of Contents
  1. 5 Powerful Bearish Candlestick Patterns
    • 1. Hanging Man
    • 2. Dark Cloud Cover
    • 3. Bearish Engulfing
    • 4. The Evening Star
    • 5. The Three Black Crows
  2. Bottomline
  3. Frequently Asked Questions (FAQs)
    • What are bearish candlestick patterns?
    • What is the 3 candle rule in trading?
    • How can you tell if a candle is bearish?

In this blog, we will be discussing 5 Powerful Bearish Candlestick Patterns:

5 Powerful Bearish Candlestick Patterns

bearish candlestick

1. Hanging Man

Hanging man is a bearish reversal candlestick pattern having a long lower shadow with a small real body.

Appearing at the end of the uptrend, this bearish candlestick pattern indicates weakness in the ongoing price movement and shows that the bulls have pushed the prices up but they are not able to push further.

It has a small real body which indicates a small distance between the opening and closing price. The lower shadow should be twice the length of its body and there is no upper shadow.

This pattern helps the traders to square their buy position and enter a short position.

Below is an example of the formation of the Hanging Man on the Daily chart of Nifty 50 below:

hanging man candlestick pattern

2. Dark Cloud Cover

Dark Cloud Cover is a bearish reversal candlestick pattern formed at the end of an uptrend and indicating weakness in the uptrend.

This candlestick pattern is made of two candlesticks, the first being a bullish candlestick and the second one being a bearish candlestick.

As the prices rise, this pattern becomes important for the reversal to the downside.

Below is an example of the Dark Cloud Cover in the daily chart of Sun Pharmaceutical Industries Ltd.

Dark Cloud Cover bearish Candlestick Pattern

3. Bearish Engulfing

The bearish engulfing pattern is the bearish reversal pattern which signals a reversal of the uptrend and indicates a fall in prices due to the selling pressure exerted by the sellers when it appears at the top of an uptrend.

This pattern triggers a reversal of the ongoing uptrend as sellers enter the market and make the prices fall.

The pattern is formed by two candles with the second bearish candle engulfing the ‘body’ of the previous green candle.

Learn how to trade with bearish and bullish engulfing patterns

Below is an example of the Bearish Engulfing pattern as shown in the daily chart of Reliance Industries:

Bearish Engulfing pattern

4. The Evening Star

An Evening Star is a candlestick pattern that is used by traders for analyzing when the uptrend is going to reverse to a downtrend.

This candlestick pattern consists of three candlesticks: a large bullish candlestick, a small-bodied candle, and a bearish candlestick.

Evening Star patterns appear at the top of the uptrend and signal that the uptrend is going to reverse to a downtrend

Below is an example of the Evening Star pattern formed in the Nifty 50 chart below:

Evening Star Candlestick Pattern

5. The Three Black Crows

Three Crows pattern is a multiple candlestick pattern that is used for predicting the reversal of the downtrend from the uptrend.

It is formed when the sellers exert bearish forces and make the prices fall for three consecutive days.

Traders can take a short position after the bearish candlestick pattern is formed.

Traders should take the help of volume and technical indicators to confirm the formation of this candlestick pattern.

Below is an example of the daily chart of Phillips Carbon Black Ltd. that the Three Black Crows Candlestick pattern :

The 3 black crows candlestick pattern

Bottomline

Hanging man is a bearish reversal candlestick pattern having a long lower shadow with a small real body. Dark Cloud Cover is a bearish reversal candlestick pattern formed at the end of an uptrend and indicating weakness in the uptrend. The bearish engulfing pattern is the bearish reversal pattern that signals a reversal of the uptrend and indicates a fall in prices due to the selling pressure exerted by the sellers when it appears at the top of an uptrend. An Evening Star is a candlestick pattern that is used by traders for analyzing when the uptrend is going to reverse to a downtrendThree Crows pattern is a multiple candlestick pattern that is used for predicting the reversal of the downtrend from the uptrend.

Frequently Asked Questions (FAQs)

What are bearish candlestick patterns?

On price charts, bearish candlestick patterns are formations that suggest future declines in the market. They offer visual indicators of the mood of the market and possible price movement, indicating that there is a good chance the asset’s price will drop.

What is the 3 candle rule in trading?

A big down candle, a smaller up candle enclosed in the previous candle, and then another up candle that closes above the close of the second candle make up the bullish reversal pattern known as the “three inside up pattern.”

How can you tell if a candle is bearish?

When sellers outweigh purchasers during an uptrend, a bearish engulfing pattern forms. A long red (black) real body swallowing a small green (white) real body reflects this action. The trend suggests that sellers are in charge again and that the price may drop further.

Tags: basicbearish reversal candlestickscandlestick beginners guidecandlestick pattern
ShareTweetSend
Get Kotak Offer Get Kotak Offer Get Kotak Offer
Previous Post

5 Powerful Bullish Candlestick Patterns

Next Post

How can we earn Rs 500 from the Stock Market daily?

Vivek Bajaj

Vivek Bajaj

Mr. Vivek Bajaj has over 18 years of trading experience in equities, options, currencies, and commodity markets. He is the co-founder of Stockedge and Elearnmarkets and is passionate about data, analytics, and technology. He serves on various exchange committees and has played a significant role in the evolution of India's derivative market. He has been a speaker at various colleges and higher institutions, including IIT and IIMs.

Related Posts

How to Trade with Bullish Engulfing and Bearish Engulfing Patterns 2
Technical Analysis

How to Trade with Bullish Engulfing and Bearish Engulfing Patterns

December 8, 2023
29.7k
Piercing Pattern - How to trade with Piercing Candlestick? 3
Technical Analysis

Piercing Pattern – How to trade with Piercing Candlestick?

December 7, 2023
19.8k
Hammer Candlestick Pattern - Formation, Example and Limitations 4
Technical Analysis

Hammer Candlestick Pattern – Formation, Example and Limitations

December 6, 2023
31.1k
Top 10 Chart Patterns you should know when Trading in the Stock Market 5
Technical Analysis

Top 10 Chart Patterns you should know when Trading in the Stock Market

December 5, 2023
167.6k

Comments 10

  1. Samer says:
    3 years ago

    Great!

    Reply
    • Sakshi Agarwal says:
      3 years ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  2. Jai says:
    3 years ago

    very nice

    Reply
    • Sakshi Agarwal says:
      3 years ago

      Hi,

      We are glad that you liked our post, you can read more blogs on Technical Analysis from here.

      Thank you for Reading!

      Reply
  3. Jigar Jani says:
    2 years ago

    Great explanation
    Thanks 😊 🙏

    Reply
    • Sakshi Agarwal says:
      2 years ago

      Hi,

      We really appreciated that you liked our blog.

      Keep Reading!

      Reply
  4. santhosh says:
    2 years ago

    Basic & very strong cocnept

    Reply
    • Sakshi Agarwal says:
      2 years ago

      Hi,

      We really appreciated that you liked our blog! Thank you for your feedback!

      Keep Reading!

      Reply
  5. Malebogo Baisi says:
    5 months ago

    Hello very interesting and want to learn more. Where do I go.

    Reply
  6. aryan says:
    3 weeks ago

    Good

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Elearnmarkets Logo

Follow Us

Facebook-f Twitter Instagram Linkedin-in Youtube Telegram

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

Download App

Playstore logo
Download on app store

Categories

  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Technical Analysis
  • Marketshala
  • Miscellaneous

Popular On Elearnmarkets

  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati

© 2023 Elearnmarkets. All Rights Reserved

  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling
  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

Get Elearnmarkets App

No Result
View All Result
  • Article Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • Hindi
    • Bengali
    • English
  • Courses
  • Webinars
  • Stories

© 2020 Elearnmarkets All Rights Reserved

A Handbook of Technical Analysis
To start your trading journey as a seasoned technical analyst
Download Now
Guidebook On Chart Patterns
Take Your Trading To The Next Level With Strategies Shared In This Ebook
Download Now
Masterclass on Short-term Momentum Trading
Harness the Power of Market Momentum to Identify High Probability Trading Setups